February 20, 2019 / 8:41 AM / 6 months ago

Hong Kong stocks end higher on trade, Fed optimism

* HSI +1 pct, HSCE +1 pct; A-shares inch up

* Softer U.S. stance on March 1 deadline, talks resume

* Fed official says further hikes not needed right now

HONG KONG, Feb 20 (Reuters) - Hong Kong stocks ended higher on Wednesday on hopes that Beijing and Washington will broker a trade deal and de-escalate their year-long tariff war, while U.S. Federal Reserve official’s comment on holding off further rate hikes lifted sentiment. ** At the close of trade, the Hang Seng index was up 1 percent at 28,514.05 points, while the Hang Seng China Enterprises index also ended 1 percent higher. ** Gains were seen across the board. The sub-index of the Hang Seng tracking energy shares ended up 0.7 percent, while the IT sector closed 1.3 percent higher, the financial sector ended 1 percent firmer and the property sector closed 1 percent higher. ** Beijing and Washington started a new round of talks on Tuesday with sessions at a higher level to be held later in the week. U.S. tariffs on $200 billion in imports from China are set to rise to 25 percent from 10 percent if no deal is reached by March 1. ** On Tuesday, U.S. President Donald Trump again suggested that he was open to pushing off the deadline to complete negotiations, saying March 1 was not a “magical” date. Investors expect a deal to be reached next month. ** In Mainland China, the Shanghai Composite Index and the blue-chip CSI300 index both edged higher on trade talk optimism. ** The interest rate-sensitive Hong Kong market enjoyed a further boost, after New York Fed President John Williams said on Tuesday he was comfortable with the current level U.S. interest rates, and that fresh hikes are not necessary unless economic growth or inflation shifts to an unexpectedly higher gear in the United States. ** Several Fed policymakers have said they expect one hike, or none at all, as the economic picture in the United States turn gloomy. ** The three largest H-share percentage gainers were China Gas Holdings, which closed up 10.4 percent, China Life Insurance Co Ltd, which ended 4.3 percent firmer, and China Cinda Asset Management Co Ltd, which closed 3.7 percent higher. China Life was also the biggest percentage gainer on the main Hang Seng index. ** Around the region, MSCI’s Asia ex-Japan stock index rose more than 1 percent, while Japan’s Nikkei index closed up 0.6 percent. ** At close, China’s A-shares were trading at a premium of 18.52 percent over the Hong Kong-listed H-shares. (Reporting by Noah Sin, Editing by Sherry Jacob-Phillips)

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